ICYMI: How the Trump Republican Tax Cuts Are Helping Iowa
By John Kartch
Published Friday, July 3, 2020
Iowa is benefiting greatly from the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump:
243,620 Iowa households are benefiting from the TCJA’s doubling of the child tax credit.
Every income group in every Iowa congressional district received a tax cut. Nationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.
1,008,949 Iowa households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.
38,430 Iowa households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.
Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, Iowa residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. Iowa utilities that have passed along tax savings include -- but are not limited to -- Iowa American Water Co. and MidAmerican Energy Company (see below).
Thanks to the tax cuts, Iowa businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:
Geetings, Inc. (Pella, Iowa) -- Was able to purchase new semitrailers and give employees raises because of the Tax Cuts and Jobs Act.
When small business owners anticipated how much they would save in taxes under the federal Tax Cuts and Jobs Act, many reinvested those savings in their businesses and their employees.
Lana Pol, who owns several small businesses including Geetings, Inc., a transportation firm in Pella, says she gave employees raises and purchased six new semitrailers. -- June 3, 2019 Des Moines Register
Smokey Row Coffee Shops (Des Moines, Iowa) -- Because of the Tax Cuts and Jobs Act, the company is planning to open two new stores.
When small business owners anticipated how much they would save in taxes under the federal Tax Cuts and Jobs Act, many reinvested those savings in their businesses and their employees.
...
Butch Hayes, of Smokey Row Coffee Shops, is planning to open two new stores. -- June 3, 2019 Des Moines Register
Global Water Services (Lisbon, Iowa) -- Hired new employees and built a new warehouse because of the Tax Cuts and Jobs Act.
When small business owners anticipated how much they would save in taxes under the federal Tax Cuts and Jobs Act, many reinvested those savings in their businesses and their employees.
...
The owner of Global Water Services in Lisbon, Keith Huebner, built a new warehouse and added employees. -- June 3, 2019 Des Moines Register
Anfinson Farm Store (Cushing, Iowa) -- $1,000 bonuses and 5% pay raises for employees:
Anfinson Farm Store, a family business in Cushing, Iowa (population 223), has awarded $1,000 bonuses and raised wages 5% for all full-time employees as a result of tax reform. The good news was delivered to employees in person just after Christmas.
In an interview with Americans for Tax Reform, store owner John Anfinson said tax reform will boost “money that will be available for the business overall and I want to use it in the right places.”
Anfinson has helmed the store for about 45 years. His grandfather started the business as a general store in 1918, so they will soon celebrate 100 years of operation. His customers chiefly grow corn, soybeans, and alfalfa.
“For us, we have a small number of employees. I work every day shoulder to shoulder with everyone,” said Anfinson. “When you work every day with a group of people, you know them and their family and you appreciate everything they do. I value them and the interest they take in our customers. They are the most valuable asset in any business.” – Jan. 9, 2018 Americans for Tax Reform blog post
Mowbility Sales & Service (Pella, Iowa) – The owner said that she was able to save around $40,000 from the tax bill, which allowed her to give employees raises and purchase new semitrailers:
Lana Pol’s small businesses are enjoying big savings under the new tax law — at least for now.
The entrepreneur runs four small companies across Iowa, including Mowbility Sales & Service, which sells agricultural equipment, and Geetings Inc., a trucking and warehousing business. Pol said she saw a drop in her overall tax burden this year thanks to the qualified business deduction, a change made to the individual tax code, available for pass-through entities. Her savings look substantial.
“We’re estimating around up to $40,000,” Pol said. “By utilizing that, we gave our employees raises, knowing that was going to help us for taxes this year.”
Pol said she also utilized Section 179 expensing to write off a major purchase of new semitrailers — six in all, totaling $1 million. Taxes were often a top issue prior to reform, she said. – March 18, 2017, CNBC article.
Keg Creek Brewing (Glenwood, Iowa) - Expanding operations, purchasing new equipment:
“A small brewery in Glenwood, Iowa, in Mills County called Keg Creek is expanding their operations and investing in new equipment as they grow.” - June 11, 2018, Rep. David Young statement on U.S. House Floor
Mississippi River Distilling Co. (Le Claire, Iowa) – The owners of the distillery said that the Tax Cuts and Jobs Act helped create new jobs:
Both Quint and Ryan Burchett, co-owner of Mississippi River Distilling Co. in Le Claire, said the tax cut — formally called the Craft Beverage Modernization and Tax Reform Act — has helped their businesses add full- and part-time jobs.
Cedar Ridge currently has 24 full-time and 28 part-time employees and, Quint said, now that he’s “optimistic” the liquor tax cut will be extended, he plans to make two new job offers over the next two weeks.
Burchett said Mississippi River Distilling had three full-time and five part-time employees in 2017, before Congress approved the liquor tax cut as part of the broader Tax Cuts and Jobs Act. – Dec. 18, 2019, The Gazette article.
Dyersville Die Cast (Dyersville, Iowa) - $200 bonus for all eligible full-time employees; $50 monthly bonus for at least twelve months for all eligible full-time employees; $150,000 in total on bonuses:
“Dyersville Die Cast employees will be getting bonuses thanks to the recently passed tax reform bill.
Full-time employees who were with the company prior to Oct. 1, 2017 will receive a $200 bonus on March 9. But, that’s not all.
All full-time, hourly employees will also be receiving $50 monthly bonuses for at least the next 12 months.
In addition, employees will still receive their regular “profit bonus” in June, according to General Manager Bob Willets.
The big news is thanks to that fact that Dyersville Die Cast is slated to save approximately $200,000 thanks to the new tax law, and have decided to dole out $150,000 of that to its workers” – Feb. 21 2018, Dyersville Commercial article excerpt
Nelson Construction & Development (Sioux City, Iowa) -- The company is in the process of restoring the historic building that they acquired, which is located in an Opportunity Zone created by the Tax Cuts and Jobs Act:
A
Sioux City developer has purchased the historic Benson Building at the corner
of Douglas and Seventh streets.
Nelson Construction &
Development, the property's new owner, is planning to "breathe new life
into" the six-story brick and terra cotta structure built in 1920,
according to a press release from the firm.
The sale price was $350,000,
according to county sales records.
Steve Nelson, the head of Nelson
Construction, said the firm is in the process of having the building, 705
Douglas St., registered as an Iowa historic building.
The plan is to return the
building to its 1920s-1930s glory, Nelson said, preserving original elements of
the building wherever possible. The firm has the original planning documents
used during the building's construction a century ago, which could be something
of a roadmap for a historically accurate restoration.
"You'll see a lot of
restoration, not necessarily new things added," Nelson said.
Nelson said the firm is in talks
with a retailer as a tenant for the lower floor, which he said would "really
supplement the downtown."
Floors three through six, he
said, will probably be apartments, while the second floor and the remainder of
the first floor would be office space. The first floor, the only part of the
building that currently has occupants, is about 80 percent filled at present,
he said.
The building's basement could
become an underground parking garage, which would complement the property's
adjacent surface parking lot.
The possibility of a rooftop
patio with a view of the Hard Rock Hotel & Casino is also under
consideration, according to the press release.
Interior work on the building,
Nelson said, could start within the next 60 days or so, with more construction
beginning possibly in September or October. From the time construction starts,
Nelson estimated it could be 12 to 14 months until apartments are leased.
The Benson Building is situated
within the boundaries of a newly created federal "Opportunity Zone,"
a part of the 2017 tax law which provides tax advantages for owners of properties
in areas considered economically distressed. -- March 4, 2020 Sioux City Journal article
Pattison Sand Company (Clayton, Iowa): $600 cash bonuses, base pay raised by $1.50-$2.50 per hour:
“Last fall, Congressman Rod Blum visited our mine in Clayton County. He met many of our people and saw for himself what we do every day. We told him about the high costs of over-taxation and over-regulation. He listened. He did his part, taking our message back to Washington. He fought for real tax reform that will bring our business taxes in line with other industrialized countries. More importantly it will mean more take home pay for our people. He is also working put more common sense into federal regulations. We did our part too. We gave every employee a $600 cash (in $2 bills) bonus and we raised base pay by $1.50-$2.50 an hour. And yes we are growing, adding staff and buying more equipment. We thought you should know.” – The Waterloo- Cedar Falls Courier
Cedar Rapids Toyota (Hiawatha, Iowa) – $500 bonuses to each full-time employee:
The car dealership off Boyson Road in Hiawatha expects to see a savings on its taxes under the federal tax reform bill that taxes effect next month. Instead of investing in the facility or new equipment, the company invested in its people.
Owner Scott Ryan decided to give each full-time employee a $500 tax break. The company sees the bonus checks as a way to give back to both the employees and the community, thinking many of the employees will spend the extra money around town. – Jan. 19, 2018 KCRG TV9 news report
Employers Mutual Casualty Insurance (Des Moines, Iowa) -- $1,000 bonuses for employees with the exception of Vice Presidents and above.
Iowa American Water Co. (Davenport, Iowa) – The utility will pass along tax savings to customers:
And Iowa-American Water Co., which provides service in eastern Iowa, would provide $1.5 million and $1.8 million to customers. – Jan. 29, 2018 Des Moines Register article excerpt
MidAmerican Energy Company (Des Moines, Iowa) - the utility will pass along tax reform savings to customers:
Thanks to tax reform, utility bills will start going down soon. MidAmerican Energy says bills will be lowered for its Illinois customers starting in April, and probably for Iowa customers in May.
Spokeswoman Tina Hoffman says the company's tax rate dropped from 35 to 21 per cent, and as a result Illinois electric and natural gas customers will save about 50 dollars per year. The average Iowa customer would save 30 dollars.
But tax reform will affect more than just MidAmerican’s corporate tax rate.
"And what we're proposing to do is create an account that captures these benefits that will help us in the long-term make sure that we reduce the size of even the need for future rate cases. So eventually that keeps rates low for customers well into the future."
Hoffman says the Illinois Commerce Commission has already approved the company's proposal and the savings should show up in residential bills this month. However the Iowa Utilities Board has not yet approved MidAmerican's proposal but she thinks it could lower Iowa bills beginning in May. – April 2, 2018 WVIK Article
Ohnward Bancshares (Maquoketa, Iowa) -- $1,000 bonuses for all 260 employees:
"As a result of the passage of the tax relief bill this week, Ohnward Bancshares has announced it will pay a $1,000 tax relief, holiday bonus to every company employee. This bonus is separate, and, in addition to, normal bonuses received based on company performance. “There has been a lot of debate about what a tax cut will do for the nation’s economy. This sweeping tax reform will create economic growth in our communities, but only if the expense savings are shared”, comments the Ohnward leadership team, Abram Tubbs, Brigham Tubbs, Alan Tubbs and Kendra Beck." – Dec. 21 2017, Ohnward Bancshares press release
Bank Midwest (Spirit Lake, Iowa) -- $500 bonuses for full-time employees; $250 bonus for part-time employees.
T.J. Maxx – 11 stores in Iowa – tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and charitable donations:
The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:
Associates
· A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
· An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
· Instituting paid parental leave for eligible Associates in the U.S.
· Enhancing vacation benefits for certain U.S. Associates
Communities
Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28, 2018 The TJX Companies Inc. press release excerpt
AT&T -- $1,000 bonuses to 541 Iowa employees; Nationwide, $1 billion increase in capital expenditures:
Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.
Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. -- Dec. 20, 2017 AT&T Inc. press release
Home Depot -- 10 locations in Iowa, bonuses for all hourly employees, up to $1,000
Lowe's -- 1,000 employees at 11 stores in Iowa. Employees will receive bonuses of up to $1,000 based on length of service; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.
Apple (Apple store in West Des Moines) -- $2,500 employee bonuses in the form of restricted stock units; Nationwide, $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.
Bank of America (Multiple locations in Iowa) -- Iowa-based employees of Bank of America will receive $1,000 bonuses.
Cintas Corporation (Multiple locations in Iowa) -- $1,000 bonuses for employees of at least a year, $500 bonuses for employees of less than a year.
Comcast (Multiple locations in Iowa) -- $1,000 bonuses; at least $50 billion investment in infrastructure in next five years.
Ryder (Eleven locations in Iowa) – Tax reform bonuses for employees totaling $23 million nationwide.
Starbucks Coffee Company (89 locations in Iowa) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plant and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave
U-Haul (Multiple locations in Iowa) – $1,200 bonuses for full-time employees, $500 for part-time employees.
Wal-Mart – 59 store locations in Iowa -- Walmart employees are receiving tax reform bonuses of up to $1,000; base wage increase for all hourly employees to $11; expanded maternity and parental leave; $5,000 for adoption expenses.
McDonald’s (165+ locations in Iowa) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:
McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.
The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.
“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”
Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:
o Increased Tuition Investment:
o Crew: Eligible crew will have access to $2,500/year, up from $700/year.
o Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
o Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
o Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
o Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
o Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
o Creation of an International Education Fund: Grants to provide local initiatives and incentives in global
markets to further education advancement programs.
“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”
After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt
Wells Fargo – 64 bank locations in Iowa; raised base wage from $13.50 to $15.00 per hour; $400 million in charitable donations for 2018; $100 million increased capital investment over next three years.
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